ERC Denial Letters: What To Do?... [ read ]
Having been involved in ERC matters for some time now, we have been waiting for the IRS to finally act—and act in a material manner—with respect to its massive inventory of pending ERC claims. The IRS is finally acting. To that end, the IRS has begun issuing large batches of ERC denial letters. Of the denial letters that we are seeing, there are several recurring issues:
ERC All the Time: Another Update from IRS on Enforcement... [ read ]
On August 8, 2024, the IRS released another update on its ERC efforts – the second update in two weeks. Beyond confirming the IRS' commitment to ferreting out abuse and reminding taxpayers of various options to remediate questionable ERC claims, the IRS offered a few interesting data points and meaningful developments.
IRS and Jeopardy Assessment... [ read ]
It has been almost four years since we lost the great Alex Trebek, the host of Jeopardy, one of the greatest game shows in television history. Trebek was the host of Jeopardy for 37 years and Jeopardy has not been the same since he died.
IRS Releases Additional ERC Red Flags, Foreshadowing Improved Enforcement... [ read ]
ERC audit results are flowing in, with the IRS adding five "warning signs" to its previously identified seven. Beyond the mild amusement of the IRS identifying 12 warning signs for ERC – a transaction on the IRS' Dirty Dozen list – the announcement points to improved future enforcement and teases of a new ERC voluntary disclosure program.
Adequate Disclosure Using the Form 8275-R in a Post-Loper Bright World... [ read ]
With the recent Supreme Court case in Loper Bright, tax practitioners are starting to consider whether certain interpretive Treasury regulations are still valid in a world without Chevron deference. As practitioners weigh whether to advise clients to take reporting positions that are contrary to Treasury regulations, it is important to keep in mind potentially applicable statutory penalties and ethical rules such as Circular 230.
ERC Income Tax Return Amendments Present Tough Choices for Employers... [ read ]
According to IRS published guidance, when an employer claims the employee retention credit ("ERC"), the employer is supposed to make a corresponding amendment to its income tax return to reduce its wage expense deduction by the amount of the employee retention credit.
Supreme Court Limits IRS Authority... [ read ]
In Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned a 40-year-old legal precedent which granted judicial deference to federal regulators' interpretation of ambiguous laws. That level of deference was commonly known as Chevron deference.
The Time For ERC Recipients to Get Comfortable Just Got a Little Longer... [ read ]
The IRS has been extremely vocal about the number of erroneous and/or fraudulent Employee Retention Credit (ERC) filings and its intent to seek repayment of these improper ERC payments. On June 26th, the 9th Circuit Court of Appeals reversed a district court dismissal of a government suit to recover an erroneous refund which could impact ERC recipients.
Recent IRS ERC Update May Increase Necessity of Refund Lawsuits... [ read ]
Employers are facing a pivotal moment with the Internal Revenue Service's (IRS) latest announcement regarding the Employee Retention Credit (ERC). In a news release dated June 20, 2024 the IRS acknowledged that it is about to deny a material amount ("tens of thousands") of ERC claims based on the IRS's identification of "risky… and improper claims."
ERC 2021 Recapture Letters on the Horizon... [ read ]
The IRS has been actively issuing notices regarding the recapture of excess employee retention credits (ERC). And, based on IRS public comments, it is anticipated that they will soon begin sending out recapture letters for the year 2021.
